The investor would be given a 15% shareholding as there would be a 70% ROI over years. If it is debt, we can offer 5.5% with a payback period of 5 years.
Currently myself, my brother and my uncle have a 90-head cattle herd, consisting of 50 sheep, 30 goats and 25 chickens being farmed on communal land in the rural villages. We plan to go mainstream by getting a farm land which would be solely for the focussed farming. This would give one an opportunity to expand the operations by breeding more cattle, sheep, goats, and chickens.
There is limited scope of growth using communal land in rural village to undertake animal farming. The combined existing stock of 90 herd of cattle, 50 sheep, 30 goats and 25 chickens creates an opportunity to acquire a piece of farm land that would permit focussed farming with an ability to breed for stock for resale as meat. Thus we will commercialise the current self-sufficiency approach.
There is a high need for this kind of farming products, as butcheries, supermarkets, hospitality/lodging facilities, hospitals and prisons could be supplied from these including direct sales to communities for their burials, weddings or any other festivities or rituals. Goats are in high demand in KZN which could be a growth market as they are used extensively for their traditional, cultural rituals. Chicken is a stable food in many families in rural villages even in urban Gauteng as blacks still prefer to buy them live for cooking including as part of rituals.
Investment would be used for buying stock and implements and investing in a bigger piece of farmland.
On one piece identified there is also an opportunity to start and manage a mineral bottled water business as there is fountain of pure, clean water falling off the mountain.
Investment required is $1,400,000 with positive gross profit percentage of 80% and EBITDA of 50% p.a. over 5 years.
The investment/loan could be repaid in full in 4 years or investor withdraws at 5 years having earned profit share for every year. A 15% shareholding is offered for the investment.
The market is not yet saturated as indicated in the full description of the project above. A professionally, niche focused operation with dedicated marketing and distribution platform would give the company advantage. Excellent service, understanding and appreciation of cultural dynamics would add more. There is food shortage as more and more investors are moving into ecotourism business leaving this market and thus sustainability and synergies and complementary collaboration could enhance even preparing us for the international, African, Asian and European market.
The deal makes sense as currently even the UN does acknowledge that there is less food supply and production and as the population grows the demand for food growth.
The intention is to build strategic alliances or develop own abatoirs to ensure that the meat is ready for export, distribution in consumable form.
The more herd of cattle, goats, chickens you have the money you make as the demand is very high and the pricing highly favourable. It may cost between 30 to 50% to breed of the selling price
The investment would be used for:
Investment in the farming land: $655,000
Purchase of new stock $179,000
Implements and feeds $566,000
Two rounds unless $250,000 is added for the abbatoirs as currently there are normal slaughter and freezer facilities.
The investor would be given a 15% shareholding as there would be a 70% ROI over years.
If it is debt, we can offer an interest rate of 5.5% with a payback period of 5 years with the loan amount of $1,400,000. A 10 month payment holiday is required as it would be setting up operation and most of these animals require on average 15 months to breed. Thus current could have been pregnant including some of the new stock and then ready to realise after 10 months. Thus most of the initial cash flow would come from the chickens and bottled mineral water which would take 3 months to set up and put into the market.